Does the holding period start from the day you sign the purchase papers or the day the sale officially closes? My closing took almost 2 months!

The holding period is generally calculated from the day the first sale closes (when you acquired the property) to the day the second sale closes (when you sold it). The date on the closing documents is what matters, not when you signed the purchase agreement. So in your case, the 2-month closing period would count toward your holding time, which is good if you're trying to reach that 1-year mark for long-term capital gains treatment.

You'll need at least Premier for capital gains from land sales. Deluxe won't handle Schedule D properly. I tried last year and had to upgrade mid-filing.

Thanks for saving me the headache! I'll just go straight for the Premier version then.

What kind of documentation did you need from your parent? My mom isn't great with paperwork and I'm worried about this exact situation.

I had my mom write a simple statement saying: "I confirm that [my name] provided over 50% of [brother's name]'s total support for the tax year, including [list specific things I paid for]." She signed and dated it, and I had it notarized just to be safe, though that might be overkill. The key was having her acknowledge that my contributions exceeded half of his total support. You could help your mom draft something similar - it doesn't need to be complicated. The IRS just wants confirmation from the person they live with that you're the primary financial supporter.

Yes, the value of lodging counts as support! The IRS considers the fair rental value of the home as part of the total support calculation. So if your dad provides free housing valued at say $1,000/month ($12,000/year), that counts as support from him.

Thanks for explaining that. Looks like I might not meet the 50% threshold then. The rental market where they live is really expensive, so even though I'm paying probably $15k annually for my sister's other expenses, the housing value might push my dad's contribution higher than mine.

What specific things should we include in our partnership agreement regarding the payment for performances? We have a basic agreement but didn't get that detailed.

You should specifically include language about "guaranteed payments" for services performed by partners. This would clearly state that your partner receives $X per performance, regardless of the partnership's profitability, as compensation for services rendered in their capacity as a partner. You should also include how profits and losses will be allocated after accounting for these guaranteed payments. In your case, it would specify that after paying all performers (including your partner) and other business expenses, the remaining profits are split 50/50. Having this clearly documented will make your tax filings much more straightforward and defensible if ever questioned by the IRS.

This is really important advice. First-time business owners often miss this and end up with underpayment penalties. I've found that setting aside about 30% of net income for taxes is a good rule of thumb for most partnerships.

Is that $1,000 per partner or for the partnership as a whole? And how do we calculate how much to pay each quarter?

Thank you so much for this checklist! I definitely didn't realize I needed my bank statements showing interest. How much interest needs to be reported? My savings account only earned like $25 last year.

You should report all interest income, even small amounts. Your bank should have sent you a 1099-INT form if you earned more than $10 in interest. Even if it's only $25, it's technically required to be reported. Don't stress too much about small amounts though. The IRS is mainly concerned with larger discrepancies. Just enter what you have documented and keep good records going forward. Tax software makes it really easy to enter these small amounts.

It depends on your situation, but generally if you're single and earned less than $12,950 in 2022, you're not required to file. HOWEVER, you should probably file anyway because you'll likely get back all the federal taxes that were withheld from your paychecks!

Oh this is super helpful! I just checked my TurboTax account and found exactly this problem - I had set up an account for my ex years ago and somehow that routing info got saved as my primary. So weird that TurboTax would keep outdated bank info for years without confirming it's still valid! How long did it take from when you discovered the problem until you got your refund check?

From discovery to actually receiving the check was about 10 weeks total. The most frustrating part was that the "Where's My Refund" tool was completely useless during this time - it just kept saying the refund was sent to my bank account for weeks after the bank had already rejected it. If I were going through this again, I'd skip the frustration of trying to call myself and use one of the services others mentioned. The not-knowing was the worst part, and getting actual confirmation that the IRS was aware of the rejection and processing a check would have saved me a lot of anxiety.

I actually managed to get TurboTax to help after a LOT of escalation. The trick is to not deal with the first-level support. Ask specifically for a "Tax Specialist" and mention that the software incorrectly transmitted your banking information. They ended up giving me a direct contact at the IRS and even followed up to make sure my issue was resolved. They also refunded my TurboTax fees and gave me free filing for next year. But it took about 6 calls and a lot of insistence that this was their error, not mine.